The transforming growth factor-B (TGF-B) family includes a large group of structurally similar secreted proteins with diverse biological activities. Prominent members include the bone morphogenetic proteins (BMPs) and activin, which have potent morphogenetic activity in developmental assays. These signals also regulate renewal and repair of mature tissues, where loss of regulation leads progressively to dysplasia, tumorigenesis and tumor invasion. Mutations in the central components for signal transduction, including the Smad proteins, are frequently found in human tumors, and the human Smad4 gene is a locus for juvenile polyposis, a genetic syndrome that causes dysplasia of the intestinal epithelium and predisposes for colon cancer. Biochemical evidence suggests that members of the TGF-B family share a very limited number of intracellular signal transduction pathways. However, genetic evidence from Drosophila suggests that closely related ligands have distinct developmental functions. To reconcile these observations, it is necessary to study in vivo development of a single tissue at the cellular level. The investigators have developed a unique combination of assays and genetic tools that make the ovarian follicle cells of Drosophila an ideal system to dissect the roles of TGF-B family members in morphogenesis. Their working hypothesis is that BMP signals induce anterior follicle cell morphogenesis, and that an activin pathway acts in posterior follicle cells to oppose the BMPs. First, they will delineate the functional TGF-B signal transduction pathways in this tissue, using signal-dependent nuclear localization of an endogenous Smad, MEDEA, as a direct and immediate assay for signal activity. In parallel, they will dissect the roles of different BMP signals in regulation of cell shape and migration of the follicle cells. Finally, their data demonstrate that activin signaling regulates gene expression in this tissue. They will determine the role of activin signaling in this tissue and examine the potential for interactions between BMP and activin signals. The information gained in these studies will test models for mechanisms of interaction between TGF-B family members and to develop testable models for BMP regulation of cellular morphogenesis. Understanding the delicate interplay between different TGF-B family signals that drive cellular morphogenesis is of fundamental importance to understanding morphogenesis of normal tissue architecture and the loss of regulation that leads to dysplasia and tumor invasion during carcinogenesis.